Are you depositing more money into your account? Understanding the maximum deposit limit and the potential consequences of exceeding it is crucial. This knowledge will empower you to manage your finances effectively.
Did you know that the income tax department may send you notices if you deposit an amount beyond the prescribed limit? Let’s take a closer look at the details.
Bank accounts are compulsory for everyone in India, as they are required to access government schemes. Consequently, many people have opened accounts in various banks.
Central and state governments deposit funds from respective schemes into beneficiaries’ accounts. Opening accounts in any bank in our country are not restricted.
Zero Balance Accounts: Many banks offer zero balance accounts, which can be maintained without funds.
However, certain private banks require a minimum balance of Rs. 1000 to Rs. 5000 for personal accounts and higher for accounts opened for commercial purposes. Beneficiaries of government schemes can typically open zero-balance accounts.
Banks also pay interest: They provide interest to account holders based on their rules, usually starting from 6 percent. This is why many people have accounts in multiple banks.
As per RBI Norms, a minimum balance must be maintained in all accounts except for zero-balance accounts; otherwise, banks may impose penalties.
However, many people must know the maximum allowable deposit in a savings account. According to RBI rules, there is no specific limit to the money you can keep in your savings account.
Rs.10 lakh per annum: Under RBI norms, you can deposit up to Rs.1 lakh daily, with a maximum of Rs.10 lakh annually.
However, it’s important to note that the Income Tax Department will scrutinize accounts exceeding the limit, and you will need to explain the source of the funds. This should make you more cautious and responsible in your financial transactions.
Radar alert: If you fail to furnish satisfactory information in your income tax return, the department may investigate and impose hefty fines.
Exceeding the Rs.10 lakh limit in a year does not necessarily mean you should refrain from depositing more money. However, you will need to provide proof of your income and expenses. This preparation will keep you in control of your financial situation.
Failure to do so may result in a 60 percent tax, 25 percent surcharge, and 4 percent cess on the deposited amount. However, you can confidently deposit the money with all the necessary proof.